The word “annuity” isn’t inherently a red flag. Some annuities serve a genuine purpose in retirement income planning. But if your broker’s first, second, and third suggestion after you retired with $890,000 was a high-commission annuity product, it’s worth understanding exactly why that might be happening.
Brokers and advisors are not the same thing, and the distinction matters a great deal when someone is recommending where to put nearly a million dollars.
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The Fiduciary Standard vs. the Suitability Standard
Most people assume their financial professional is legally required to act in their best interest. Many aren’t. Brokers registered with FINRA are generally held to a “suitability” standard, meaning a product only needs to be reasonably appropriate for your situation, not necessarily the best available option. A fiduciary, by contrast, is legally required to put your interest ahead of their own.
